Sports and Fitness Industry Continues to Grow in 2022

A recent report from the Sports & Fitness Industry Association reveals that the sports and fitness industry is experiencing continued growth, although at a slower pace compared to the pandemic period.

In 2022, the industry achieved a growth rate of 4.3%, following a remarkable 15.8% surge in 2021. This 4.3% increase marks the second-largest growth rate since 2010, according to Tom Cove, the president and CEO of the Sports & Fitness Industry Association. The figures encompass sports, fitness, outdoor activities, and active apparel, footwear, and equipment.

Cove attributes this positive trend to the ongoing rise in physically active Americans, which has seen growth for five consecutive years. The report indicates that 77.6% of all Americans now engage in one of the 124 sports and fitness activities tracked by the association. This figure represents an increase of 15.3 million people compared to pre-pandemic levels.

While these numbers are encouraging, there is a growing disparity between dedicated and casual participants. Over the past three years, the number of casual participants has risen from slightly over half of all Americans in 2013 to 56.4% in 2022.

The report highlights the need for the industry to engage with casual participants regularly to sustain their high levels of participation, considering that they may be more affected by rising costs and time constraints.

Cove acknowledges the challenges faced by the industry, including supply chain disruptions, inflation, and the possibility of a recession. Factors such as rising prices of essential items like gasoline and groceries can influence consumer spending on discretionary sports-related products.

Managing inventory levels continues to be an issue for the industry. While companies faced inventory shortages in 2021, the situation has improved, with 67% of surveyed companies reporting higher inventories in 2022. However, oversupply has become a concern, leading to increased promotional efforts to clear excess stock and order cancellations. Nearly 38% of respondents expressed discomfort with their inventory levels. The report suggests that it may take until at least the third quarter of this year to reach equilibrium on this matter.

Despite these challenges, the majority of firms reported improved profitability in 2022, with 55.2% indicating increased profits. However, 28.4% reported profitability levels below pre-pandemic levels.

In terms of participation categories, racquet sports saw an increase for the first time in seven years, driven by the growing popularity of pickleball. Outdoor sports, including trail running, hiking, biking, and camping, also experienced a 1.1% increase. Golf maintained its strong performance with a 9.7% rise.

Income-wise, participation increased across all income levels, with the $25,000 to $49,999 group showing the highest growth, comprising 71.8% of total participants compared to 65.3% in the previous year. Even the under $25,000 income group saw an increase from 55.4% in 2017 to 60.6% in 2022.

Regarding distribution, 61.1% of respondents reported increased sales on their own websites, while sales in their physical stores remained stable for 62.2% of respondents. Sales at specialty retailers increased by 54.3%, indicating a greater focus on digital channels and wholesale partnerships.

In conclusion, the report suggests that the sports and fitness industry’s outlook remains positive, with high demand for new and innovative products. However, there is still work to be done. The industry should reinvigorate its commitment to team sports, the running sector should continue introducing new products and technologies, and the fitness segment should adapt to allow participants to work out flexibly.